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    Greater Caspian Weekly Overview - November 19th 2015

Summary

Highlights include an exclusive interview with NIGC chief Azizollah Ramezani where he said Iran should take ten percent of the global gas market.

by: Dalga

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Weekly Overviews, Caspian Focus

Greater Caspian Weekly Overview - November 19th 2015

Iran

Iran plans to take 10% share of global gas markets

Azizollah Ramezani, the National Iranian Gas Company (NIGC)’s director for international affairs told Natural Gas Europe during an exclusive interview that Iran should take ten percent of the global gas market.

“Based on the national outlook plan, we should take ten percent of the global gas market, but for the time being, we are lagging behind the target,” he added.

Iran's current raw gas output stands at 660 million cubic meters per day (mcm/d), but this figure is expected to increase to 1,100 mcm/d by 2019, then this figure is planned to reach 1,300 mcm/d in early 2020s.

However, he said that realization of the goal will be dependent on the implementation of development projects, mainly in the South Pars gas field, which Iran shares with Qatar in the Persian Gulf.   

Iran inaugurates a new phase of South Pars

The first platform of Iran’s South Pars gas field, jointly related to phases 17 and 18, came on-stream on Tuesday with the capacity of producing 10 million cubic metres of gas (mcm) per day.

Hassan Boyeri, project manager for phases 17 and 18, said that platform 17A’s output will rise to 15 mcm per day within the next 10 days.

Platform 18A has already started producing 15 mcm of gas per day to be fed to the refineries of phases 15 and 16.

Once the new 17A platform comes on stream, it will boost refining and sweetening capacity of phases 17 and 18's refineries to 40 mcm per day.

Iran to talk gas swap with Caspian states

Iran’s Oil Minister Bijan Namdar Zanganeh said the country will be negotiating natural gas swap projects with Russia, Turkmenistan, and Azerbaijan.

“[It's] true that we have not played a key role so far in the gas export market, but the trend will change,” Zanganeh said on November 17th.

He made the remarks in a press conference held in Tehran that the outlined plans and objectives of the third summit meeting and the 17th ministerial meeting of the Gas Exporting Countries Forum (GECF), which is to be held in Tehran on November 20-23.

Last week Iran announced that it is in talks with Rosneft to start a gas swap.

Iran has no plans to build gas pipeline to EU

Alireza Kameli, managing director of National Iranian Gas Exports Company said on November 16 that construction of four to five thousand kilometers of pipeline would be needed to be establish a transfer of Iranian gas to Europe and such a pipeline would entail construction and transit costs, as well, because it would pass several countries.

Kameli said that Iran has willingness to export LNG to Europe.

China sets eyes on Iran’s $20 Bln gas market

Chinese companies have started negotiating with the National Iranian Gas Company (NIGC) for implementing projects after the lifting of the sanctions against the Islamic Republic.

NIGC managing director Hamid Reza Araqi said on November 16 that the Chinese companies have been negotiating on gas transfer projects using build-operate-transfer (BOT) and build-own-operate (BOO) methods, as well as technical and engineering services.

Meanwhile, talks with European companies are underway, Araqi said, adding that the presence of foreign companies in the country’s gas market will enter a new phase once the Joint Comprehensive Plan of Action (JCPOA) reached between Iran and world powers takes effect.

There is a capacity for investing $20 billion in the Iranian gas projects, he said. Currently, packages of investment in gas refining, storage, and transfer are prepared.

“Investment and technology transfer are the highest priority in negotiating with foreign companies," the official said. "For the time being, purchasing goods is not on the agenda.”

Last week, Iran announced that it has introduced $18 billion worth of petrochemical projects to be financed by the Chinese. Iran also says it is eyeing gas export to China.

Tehran’s GECF Summit to host nine heads of state

Heads of states from nine member states of the Gas Exporting Countries Forum (GECF) will attend the 3rd Gas Summit in Tehran on November 23, Iran’s Oil Minister Bijan Bamdar Zanganeh said on November 16.

The third summit of the GECF will kick off on November 23, with its 18 main and observer members, Zanganeh added.

He said that the participation of the leaders of Russia, Iraq, Bolivia, Nigeria, Equatorial Guinea, and Venezuela had been confirmed and that the Turkmenistan president would attend the Summit as a special guest.

Iran to inaugurate two new phases of South Pars

Phases 20 and 21 of Iran’s South Pars gas field will start production by the end of the third Iranian fiscal month of Khordad next year (June 21, 2016).

Alireza Ebadi, the acting director of development of phases 20 and 21, said that all the wells in both phases will come on stream by May 21 and June 21, respectively.

He added that offshore and onshore piping of the phases 21 and 20 are complete by 92 percent and 30 percent, respectively.

Refined natural gas produced in the two phases will be transferred to the national gas network by the next two months, he noted.

Construction of the phases’ platforms is complete by 82 percent, he said, adding that platforms of the phases 20 and 21 will be commissioned by April 21 next year.

Iran introduces 18 petrochemical projects to Chinese financiers 

Iran has introduced 18 petrochemical projects to be financed by Chinese companies, Marzieh Shahedaee, director of projects at the National Petrochemical Company (NPC) of Iran, said.

Lines of credit (LCs) for four projects, namely Sabalan, Lordegan, Bushehr, and Masjed Soleiman, have been opened and the rest are being followed up, Shahedaee said on November 14.

She referred to Andimeshk, Sadaf, Ilam, Fasa, Jahrom, Darab, Miandoab, Golestan, Ardebil, and Zanjan as the projects which have been introduced to the National Development Fund to be financed.

The NDF has allocated $1 billion to four petrochemical projects, she noted.

China has so far provided finance for six projects which will add 10.2 million tons to Iran’s petrochemical sales, she said, adding that 2.5 billion euros in Chinese LCs have been opened.

Iran’s gas consumption reaches 520 mcm/d

Daily gas consumption in Iran surpassed 529 million cubic meters, National Iranian Gas Company's spokesman Majid Boujarzadeh said.

Residential and commercial units, industrial units, and power plants consumed more than 529 mcm on November 13.

The three sectors consumed 322 mcm, 97 mcm, and 110 mcm, respectively.

Iran's residential and commercial units' gas consumption level was 160 mcm/d in late October and it's expected to reach 500 mcm/d in January.

Some 202 billion cubic meters of gas was produced in the country in the past Iranian fiscal year, which ended on March 20 and consumption level stood at 190 billion cubic meters.

Iran eyes exporting natural gas to China

Iran can use the pipeline, which is intended to export natural gas to Pakistan (Peace Pipeline), for exporting gas to southern China, managing director of the National Iranian Gas Company Hamid-Reza Araqi said on November 14.

With increasing natural gas production (from current 700 million cubic meters per day- mcm/d) to 1000 mcm/d (in 2019), an appropriate capacity for boosting gas exports will be created.

Iran hasn’t completed Peace Pipeline on its territory, while Pakistan has not even started on its soil to receive 22 mcm/d of Iranian gas, but China signed an agreement with Pakistan in April to construct a pipeline from Gwadar port (80 km away from Iran-Pakistan border) to Navvabshahr city. Iran hopes to connect Peace Pipeline to Gwadar – Navvabshahr pipeline. This pipeline could be stretched from Navvabshahr towards China borders in the future to transit Iranian gas to China.

Tehran, Moscow sign agreement on geological exploration

Russia and Iran have signed an agreement on long-term cooperation in the field of geological exploration.

Roman Panov, the general director and CEO of the Russian State Geological Company (Rosgeo), and Houshang Falahatian, the Iranian deputy energy minister, signed the agreement at the 12th Iran-Russia Joint Economic Committee Meeting.

Russia's Rosgeo plans to work in different areas in Iran and is considering gas, oil, gold and ore projects, Panov said.

Azerbaijan

Azerbaijan gas production increases by 6%

Azerbaijan’s commercial gas production increased by 6.2 percent in 10 month of 2015, compared to the same period in last year, the State Statistical Committee of Azerbaijan reported on November 17.

The report says that the country produced 16.392 billion cubic meters (bcm) of commercial gas over 10 months.

However, when considering flared and recycled gas, the country’s total gas production stood at 24.546 bcm from January to October, about 2.7 percent less than the same 10 month period in 2014.

An official at the State Oil Company of Azerbaijan Republic (Socar) told Natural Gas Europe on the condition of anonymity that currently about 28.8 mcm/d of Azerbaijani gas is produced from Shah Deniz Stage 1 and 8.5 mcm/d is associated gas from Azeri-Chirag-Guneshli oil fields. All of these fields are operated by BP.

“Socar and other operative companies produced 15.6 mcm/d of gas (excluding Shah Deniz) during October. Azerbaijan’s total commercial gas production in this month reached 52.87 mcm/d”, he said.

It is expected that the country’s gas production will increase over winter months. 

Turkmenistan

Turkmenistan to develop Galkinish 3rd stage

Turkmen President Gurbanguly Berdimuhamedow outlined the terms of starting the development of the Galkinish gas field’s 3rd stage on November 13.

He said that the development of the third phase of this giant field would be start in coming days.

The total gas reserves of Galkinish and Yashlar estimated at 26.2 trillion cubic meters.

Turkmenistan exports gas to China, Iran and Russia.

The country also started construction of the TAPI Pipeline in its territory.

By 2030 Turkmenistan wants to increase gas production to 230 bcm/y,which mostly will be exported.

In 2014, Turkmenistan produced more than 76 bcm of natural gas, while exported above 45 bcm.

Turkmenistan preparing to commence East-West Pipeline

Turkmenistan is preparing to the cross-country East-West gas pipeline in December 2015, Turkmen President Berdimuhammedow said during an exhibition and conference Oil and Gas, held in Ashgabat.

East - West pipeline starts from Shatlyk field in southeastern regions and passing through the territory of Mary, Akhal and Balkan provinces, reaches the town of Belek on the coast of the Caspian Sea.

The capacity of gas transport of this pipeline is 30 bcm/y and its length is 773 km.

East-West pipeline can be used to supply Turkmen gas to Europe as well, after construction of Trans-Caspian Pipeline.

The optimal route would be laying Trans-Caspian gas pipeline 300 km long across the Caspian Sea to the coast of Azerbaijan, which can play as a transit country for supplies of Turkmen gas to Turkey and further - to European markets.

LUKoil plans to develop Caspian Sea gas condensate field by 2024

Russian producer Lukoil will start development of the Yuri Kuvykin field in the northern part of the Caspian Sea in 2024, Gennady Ordenov, Deputy General Director of Lukoil Nizhnevolzhskneft said at a Russian-Norwegian oil and gas seminar yesterday.

“It is planned to start development of the gas condensate field Kuvykin in 2024. Gas will be transported to the Filanovsky field,” he said.

In addition, he said that balancing and commissioning works will be completed in 2015 while the drilling of the first production well on the Filanovsky field will start in the same time period. “We will start transportation of gas to the coastal facilities. It is planned to drill a total of 18 production wells at this stage. In parallel, we will start construction of the drilling and residential platform of the second phase of the Filanovsky project. The facilities will be put into operation in 2016."

The Filanovsky, Kuvykin, and Rakushechnoye fields are located in the northern part of the Caspian Sea.